Over the last fifty years, one of the bedrock principles of state and local tax jurisprudence has been the physical presence standard. The rise of E-commerce and a shifting economy, however, have for years called into question its validity. States, too, have taken notice, and new state laws are being crafted that either bypass this requirement or challenge it head-on. It may not be long before the physical presence standard becomes a thing of the past.… Read the rest

The pharmaceutical industry’s societal purpose is to improve the health of the citizenry. However, the industry is beginning to fail that purpose by producing expensive prescription drugs, which are becoming inaccessible to the average person. Pharmaceutical prices began to spike in 2014, and there is no evidence that this trend will abate in the future. The causes of this phenomenon stem from several factors: expensive patented drugs, a reduction in the supply of generic drugs, and the pharmaceutical industries large marketing and sales expenditures. In summation, this is a complex problem that cannot be solved by a single solution, nor can it be solved by cost covering measures. Instead, innovative solutions that target the root causes of spiking pharmaceutical prices need to be applied. Examples of these solutions include governmental bulk-buying power, longer patent terms, referencing pricing for patented … Read the rest

Hacking and cybercrime are on the rise.[1] From 2013 to 2015, twenty major data breaches were reported at Fortune 100 companies.[2] Publicly traded companies who have securities disclosure obligations should be aware of their duties under the federal securities laws when it comes to data breaches and hacks.[3]

In 2011, the SEC Division of Corporation Finance issued guidelines for cyber incidents.[4] The SEC stated, “[A] number of disclosure requirements may impose an obligation on registrants to disclose such [cyber] risks and incidents,” although there are no explicit requirements referring to data breaches.

While major data breaches may be material to reasonable investors of public companies, there is no duty to promptly disclose the occurrence of cyber incidents unless there have been selective disclosures, previous misstatements or circumstances making the omission of the hack misleading.[5] The federal … Read the rest

Just because a college or university received a full tuition payment, that does not mean that that university will be able to keep all, or even some, of that payment. A loophole in §§ 544 and 548 of the Bankruptcy Code allows a trustee to claim “tuition payments that insolvent parents made for their children” from the university itself.[1] The possible effects of this loophole can have an enormous impact on the future of the individual student and/or the university as well. “If the student has not graduated yet, the university could suspend” her access to certain courses and prevent her from moving forward in her academic career until further payment is received.[2] However, payment would be impossible, as the debtor has already declared bankruptcy and is thus in no feasible position to make tuition payments. As a result, the student is left … Read the rest

Lehman Brothers is often cited as an example of corporate governance failure largely due to poor oversight by the board.[1] Richard Fuld, former CEO of Lehman Brothers during its bankruptcy in 2008, still does not agree with this general evaluation. Seven years later in 2015, he gave a speech at a conference in New York.[2] Fuld spoke about Lehman’s risk management, as quoted in TheWall Street Journal: “Regardless of what you heard about Lehman’s risk management, we had 27,000 risk managers because they all had a piece of the firm.”[3] The problem, however, remains that Lehman’s employees owned a very small portion of the company stock, which did not solve its agency problem.

Lehman Brothers had a high-leverage, high-risk-taking business strategy supported by limited equity.[4] For instance, it took its leverage ratio up to 30 times its equity.[5]… Read the rest

The newly-elected government of Argentina has offered to pay all the holders of its sovereign debt.[1] This proposal is a striking reversal of Argentina’s decade-long position of only making payments to the holders of it restructured debt (“exchanged creditors”), but not to those that had refused to exchange their bonds at a 65% loss (“holdout creditors”).[2] If the negotiations are successful, and the injunctions against Argentina are lifted, these developments will bring an end to the so called “trial of the century in sovereign debt restructuring,” [3] and cement a remarkable empowerment of holdout creditors in sovereign debt restructuring processes.

Argentina’s newly elected President, Mauricio Macri, has vowed to regain access to the sovereign debt markets.[4] Currently a series of judgments and injunctions[5] have rendered Argentina unable to make payments only to the exchanged creditors, and has effectively forced the South … Read the rest

American women have been constantly fighting to have their voices heard and to achieve equal rights. It took until 1920 for women to receive the right to vote.[1] But it goes beyond voting as they sought to establish representation. For decades, women in the workforce have been underpaid to work in hazardous conditions. Eventually they began to strike, and in 1920, formed the U.S. Department of Labor Women’s Bureau aimed at representing the needs of wage-earning women in public policy.[2] Ultimately, laws such as the Equal Pay Act were put into place to “prohibit discrimination on account of sex in the payment of wages by employers engaged in commerce or in the production of goods for commerce.”[3] Nearly a century since the formation of the Bureau and decades since the passing of the Equal Pay Act, women are still fighting for fair compensation today.… Read the rest

When litigation looms for large corporations, settlement becomes a key part of the strategy discussion. In order to avoid the costliness associated with, and reputational damage from, lengthy trials, it is not unexpected for a company to dip into its litigation budget and pay a premium to avoid the hassle. Some companies, however, adopt the opposite strategy: settlement avoidance. If a company is to adopt such a strategy, it will also need to adopt proper defensive measures, such as the implementation of adequate Human Resources (“HR”) oversight, in order to effectively ride out the storm of the trial.

Background

Following Chipotle Mexican Grill, Inc. (“Chipotle”) going public in January of 2006, it came to be known as an “industry darling”.[1] Recognized for its transparency and its commitment to utilizing farm-fresh, high-quality ingredients, Chipotle was a trendsetter and leader in the fast-casual movement in dining.[2]… Read the rest

Drone technology is here to stay. They are the Obama administration’s instrument of choice for high-level officials to execute “lawful . . . lethal operations in a foreign country” aimed at enemy combatants (who can be U.S. citizens) who happen to be an “operational leader.”[1][2] To qualify, there must be an “imminent threat,” capture must not practical, and the slaying must be consistent with the laws of war. “Imminent” is a self-defense term, which demands that the official must “know, in a detailed manner, who poses such a threat, in what circumstances, and how and when such persons can be targeted.”[3] At the intersection of intelligence gathering and the decision to strike are the so-called “kill lists,”[4] which are maintained to ensure the targets satisfy all the conditions of a lawful targeted killing.

On April 6, the Department of Labor released a new regulation pertaining to the duties owed by financial advisors to their clients.[1] The new regulation, which is scheduled to go into effect on January 1, 2018, transforms fundamental aspects of the financial services industry.[2] The new rule, called a fiduciary duty rule, requires financial professionals to act in the best interest of their clients.[3] While a savvy investor or an ethical advisor may have already required this as part of their relationships, many retail investors do not know the ramifications of such a duty. The new rule forces this type of duty. Opponents of the rule argue that the new regulation will increase costs across the financial services industry, which could force small budget investors out of the advising market, during a time when they could use it. At the same time, those who … Read the rest